Canada Lithium starts mine commissioning

Canada Lithium (CLQ-T) has started commissioning the open pit and processing plant at its Quebec Lithium mine near Val d’Or, Que., with first production of spodumene concentrate expected shortly, followed by lithium carbonate output early next year.  

“We are exactly where we thought we would be at this time of the year,” Charles Taschereau, Canada Lithium’s chief operating officer, says of the company’s progress to date.

The construction has been completed and the equipment is in place, he adds, noting all the mechanical and electrical testing has been done on the first part of the plant or the concentrator. And if everything goes well, in the next few days, the company should start producing spodumene concentrate.

Part of the concentrate will be sold, but most it will be processed into lithium carbonate once the second part of the plant or the hydrometallurgical circuit is commissioned, Taschereau explains.

Production of lithium carbonate should begin in February, with first shipment slated for late March.  

In early November, Canada Lithium signed a five-year offtake and joint-venture agreement with a subsidiary of China’s Tewoo Group, where it will sell a minimum of 12,000 tonnes of battery-grade lithium carbonate a year.

It will deliver the product FOB to the Vancouver or Prince Rupert ports in British Columbia, where it will be sold at market prices, adjusted quarterly.

“The market [price] has been going up quite a lot in the last few years because demand is increasing much faster than the development of any new projects or mines,” Taschereau says, adding lithium carbonate is currently sold for US$6,000–$6,600 per tonne, while the company’s production cost are estimated at US$3,200 per tonne, before netting out by-product credits.   

Under the agreement, Tewoo can increase its offtake volume by up to 20% a year over the previous year’s deliveries. So if it chooses to do that in 2014, Canada Lithium will be responsible for delivering up to 14,400 tonnes that year.

At full production, the mine should generate 20,000 tonnes lithium carbonate per year, and is on track to reach that rate in the last quarter of 2013. It has a 14-year life.

The Quebec Lithium project also has the potential to generate 2,000 tonnes of battery-grade lithium hydroxide and up to 30,000 tonnes of sodium sulphate a year in late 2014. These co-products are expected to bring in an additional US$20 million a year in revenue.

The junior is currently looking for off-take buyers, particularly for the lithium hydroxide, which sells for around US$7,500 per tonne.

While 80% of the demand in the lithium market is for battery-grade lithium carbonate, Taschereau notes the demand for lithium hydroxide is rising and that “we want to make sure we can supply all the various chemicals to the various customers in the lithium market.”

Meanwhile, Canada Lithium says it will continue working through the Holiday period, but notes its EPCM contractor will dismiss most of the construction crew on Dec. 21. However, it will return with a smaller crew in early January to help wrap up the commissioning phase.

The junior currently has 119 full-time employees on-site, but sees that number growing to 200 once the mine reaches full production.